EXHIBIT 10.3
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(Above space reserved for recording information)
OPTION AGREEMENT
IN CONSIDERATION of the sum of One and 00/100 dollars ($1.00) and other
good and valuable consideration ("Option Price"), the receipt of which is here
by acknowledged, Xxxx & Xxxxxx Xxxxxxxxx, husband and wife and Xxxxx Xxxxxxxxx,
a single person, (collectively "Owners") grant to Granite Falls Community
Ethanol Plant, LLC, (GFCEP), an exclusive option ("Option") to purchase
approximately 25.3 acres more or less of real property described as follows, to
wit:
Part of the East one-half of the Northeast Quarter (E 1/2NE 1/4) of
Section One (1), Township One Hundred Fifteen (T115N), Range
Thirty-Nine (R39W), Excepting therefrom the right of way of Minnesota
Highway 23
Located in Chippewa County, Minnesota, (the "Option Property") and on the terms
and conditions set forth below:
1. TIME TO EXERCISE OPTION. This Option shall be exercised at any time
by written notice delivered to Owners by certified mail postmarked no later than
December 31, 2004, or by personally delivering the notice to Owners no later
than December 31, 2004 at 5:00 p.m. This Option is exclusive to GFCEP for the
duration of the Option period and Owners shall not grant any options or agree to
sell, grant or otherwise convey any other interest in the Option Property to any
other persons or entities at any time while the Option granted herein remains
exercisable. The term, duration and period of the Option shall run from the date
of execution hereof until 5:00 p.m. on December 31, 2004.
2. LAND PURCHASE PRICE. The purchase price, in the event of the
exercise of the Option shall be in the sum of One Hundred Sixty Eight Thousand
and 00/100 Dollars ($168,000.00), which includes the Option Price set forth
above.
3. TEST AND INVESTIGATIONS ON PROPERTY. GFCEP shall, at GFCEP's sole
costs and expenses, have the right to conduct tests and investigations on the
Option Property prior to the time of exercise of this Option. GFCEP agrees to
indemnify and hold Owners harmless from and against all costs, expenses,
damages, claims, and causes of action arising out of GFCEP's activities on the
Option Property prior to the time of exercise of the Option. GFCEP's activities
on the Option Property may include, but not be limited to:
a. Soil test and soil borings.
b. Any well drilling or other tests with respect to investigation
of the adequacy and quality of water resources.
c. Any search of the Option Property or property of owners
adjacent thereto for purposes of verifying that no abandoned
xxxxx are in existence within the vicinity of the facility.
d. The parties understand that the foregoing tests are intended
to include but do not limit GFCEP from performing all other
tests and investigations as may be necessary to determine the
suitability of the Option Property for construction and
operation of an Ethanol plant and related facilities and
fixtures (the "Plant").
e. GFCEP agrees that the testing and investigation shall be
conducted, to the extent reasonably possible at a time and in
a manner so as to not unduly interfere with farming operations
being conducted on or about the Option Property. To the extent
any crop damage occurs as a result of GFCEP's testing or
investigation, GFCEP agrees to reimburse Owners $300/Acre for
the damaged crop.
4. PRELIMINARY WORK. Prior to exercising its Option, GFCEP may, after notifying
Owners, perform such preliminary earth moving or other initial site preparation
or other investigation of the site so long as GFCEP provides financial assurance
to Owners that is adequate to restore the Option Property if the Option is not
exercised by GFCEP.
5. PERMITTING. Owners understand that GFCEP will be required to obtain permits
and/or certifications from Federal, State, County and/or local governmental
units prior to construction and operation of the Plant. Owners agree to permit
GFCEP to do such things as may be necessary to obtain such permits and agrees to
offer reasonable assistance in providing any information or complying with any
directives or orders issued or otherwise required by said governmental units
which may arise during any permitting or approval process.
6. SURVEY AND ROAD. The parties agree that on or before closing, they must
mutually agree on:
a. A survey of 25.3 acres more or less describing the property
which is the subject matter of this Option.
b. Enter into an Agreement with respect to maintenance, upkeep
and repair of any driveway servicing the property and the
costs of any such maintenance which shall be allocated on the
basis of usage made to the driveway by the respective parties.
7. CLOSING. The closing shall take place at such time and place mutually agreed
to between the parties within thirty (30) days of completion of the survey of
the Option property and following GFCEP's exercise of this Option. In the event
that GFCEP exercises this Option, then Owners shall immediately forward to GFCEP
(at Owner's expense) an updated abstract for examination of title. GFCEP shall
be allowed 20 days after receipt of the abstract to make any objections with
regard to title which shall be made in writing and delivered to the Owners. If
any objections are made, Owners shall have 90 days to make title marketable.
Pending correction of title, the date of closing shall be postponed, but upon
correction of title within ten days after written notice thereof to GFCEP, the
closing shall be held. If title is not corrected, to the reasonable satisfaction
of GFCEP, within the time provided for herein, then at GFCEP's Option, this
Agreement shall be null and void and the Option Price shall be refunded to it.
8. MISCELLANEOUS.
a. POSSESSION. Possession shall be delivered to Granite Falls
Community Ethanol Plant, LLC at closing.
b. CLOSING COSTS. Each party shall be responsible for paying
those expenses normally paid by a purchaser or seller of like
kind real estate in the State of Minnesota.
c. TAXES AND ASSESSMENTS.
i. All real estate taxes and assessments due and payable
in the year of closing shall be pro rated between the
parties.
ii. In the event that the sale of the Option Property
accelerates the payment of real estate taxed and any
other special assessments on Owner's property other
than the Option Property, then Owners agree that all
such accelerated taxes shall be paid by Owners at the
time of closing.
d. CROPS. If the date of closing occurs and there are growing
crops on the Option Property, then Granite Falls Community
Ethanol Plant, LLC may, at its option, do the following
i. Take title of the growing crops on the Option
Property, and pay Owners the mutually agreed value of
such crops, or
ii. Permit Owners to enter upon the Option Property and
promptly harvest such crops for Owner's sole benefit.
e. WARRANTY. Owners represent and warrant that they are the sole
fee title owners of the Option Property. Owners further
represent and warrant that there are no active or abandoned
xxxxx or underground storage tanks on the Option Property.
f EXPIRATION. If GFCEP does not exercise the Option granted
hereunder, this Agreement shall terminate upon the expiration
of the Option term and GFCEP will deliver to Owners an
instrument in writing and in recordable form acknowledging the
termination of this Agreement and the non-exercise of its
Option to purchase. In addition, GFCEP agrees to pay Owners a
sum of $7,222.00 (Seven thousand two hundred twenty two
dollars) to cover Owners' cost for property title transfer.
Upon such payment, this Agreement shall be null and void and
neither party shall have any claim or further responsibility
to or for the other.
g. NOTICES. All notice and other communications required or
permitted to be given or served under this Agreement shall be
in writing and shall be deemed to have been duly given if
delivered in person or deposited in the U.S. Mail, postage
prepaid, for mailing by certified mail, return receipt
requested, as follows:
OWNERS:
Xxxx & Xxxxxx Xxxxxxxxx
00000 X. X. Xxx. 000
Xxxxxx Xxxxx, XX 00000
Xxxxx Xxxxxxxxx
000 Xxxxxx Xxxxxx
Xxxxxxxx, XX 00000
GRANITE FALLS COMMUNITY ETHANOL PLANT, LLC
x/x Xxxx Xxxxxx
X.X. Xxx 000
2448-540th Street, Suite1
Granite Falls, MN 56241-0216
h. SUCCESSORS BOUND. This Agreement is binding upon the heirs,
successors and assigns of the parties. Any assignment of this
Option Agreement by either party shall require the advance
written consent of the other.
Dated this _____ day of February, 2003.
OWNERS
/s/ Xxxx Xxxxxxxxx
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Xxxx Xxxxxxxxx
/s/ Xxxxxx Xxxxxxxxx
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Xxxxxx Xxxxxxxxx
/s/ Xxxxx Xxxxxxxxx
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Xxxxx Xxxxxxxxx
GRANITE FALLS COMMUNITY ETHANOL
PLANT, LLC
By: /s/ Xxxx Xxxxxx
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Its: Chairman
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State of Minnesota )
) ss.
County of Yellow Medicine )
On the 21st day of February, 2003, Before me, personally appeared Xxxx
Xxxxxx, to me personally known, who, being by me duly sworn, did say that he is
the Chairman of Granite Falls Community Ethanol Plant, LLC, the limited
liability named in the foregoing instrument, and that said instrument was signed
and sealed on behalf of said limited liability company by authority of its
Governors, and said Xxxx Xxxxxx, Acknowledged said instrument to be the free act
and deed of said limited liability company.
/s/ Xxxxxxx X. Xxxx
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Notary Public
State of Minnesota )
) ss.
County of Renville )
The foregoing instrument was acknowledged before me this 18 day of
March, 2003, by Xxxx Xxxxxxxxx and Xxxxxx Xxxxxxxxx, husband and wife.
/s/ Xxxxxxx X. Xxxxxx
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Notary Public
State of North Dakota )
) ss.
County of Xxxxxx )
The foregoing instrument was acknowledged before me this 14th day of
March, 2003, by Xxxxx Xxxxxxxxx, a single person.
/s/ Xxxxx Xxxxxxxx
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Notary Public
